Canada auto parts makers back TPP, urge further gov't support

MONTREAL OTTAWA Dec 1 (Reuters) - Canada's Liberal
government should commit to a 12-nation Pacific Rim free-trade
deal inked by the country's former leaders, but it also must
invest further in local auto assembly, a group representing
auto-parts manufacturers said Tuesday.

The Automotive Parts Manufacturers Association said the
Trans-Pacific Partnership (TPP) will lead to increased
competition from low-cost rivals, but that Canada should stick
with the deal struck by its former Tory government.

The Liberal government led by Prime Minister Justin Trudeau,
elected in October, has said it will consult Canadians before
committing to any deal.

"I don't think we have a choice," said association president
Flavio Volpe in a phone interview. "We were very involved and
put a lot of pressure while the negotiations were on, and that
was the time to do it. But now it's closed."

While some in Canada's auto sector have worried about
increased Asian imports, others such as Linamar Corp
argue it could help bring in new business.

Under the North American Free Trade Agreement, a vehicle
must have 62.5 percent North American content, and an auto part
must contain 60 percent content, to qualify for tariff-free
status. TPP would decrease that threshold to 30 percent for
parts and 45 per cent for finished vehicles.

One Canadian auto union said the TPP could result in 20,000
lost jobs because it would allow automakers and auto parts
makers to sell their products tariff-free, even if they
outsource the majority of their content to low-cost countries.

Auto-parts makers, who met with federal International Trade
Minister Chrystia Freeland and Economic Development Minister
Navdeep Bains on Monday, are not looking for direct financial
compensation, Volpe said.
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